Bronchopulmonary Dysplasia (BPD) continues to affect the majority of infants born extremely premature and is primarily a disease of arrested alveolarization resulting from injury to the developing saccular lung. Protective strategies have been ineffective in reducing BPD, underscoring the need to better understand the underlying pathogenesis to enable development of novel therapies. Transforming Growth Factor- superfamily signaling regulates ECM deposition, which is critical to normal lung development, and is dynamically regulated during the saccular stage of lung development. Utilizing a clinically-relevant murine model of BPD that limits hyperoxic lung injury to the saccular stage (day 0-4 in mice) to persistently simplify adult alveolar structure, we determined TGF2 (but not TGF1 or 3 ligands) is uniquely suppressed by O2 by day 4. Although excessive TGF has been implicated in BPD pathogenesis, it is often following prolonged O2 exposure coincident with late-onset fibrosis (when BPD phenotype is already well-established); it is unclear if ligand-specific TGF signaling within the acute phase of arrested saccular development contributes to BPD pathogenesis. In addition to TGF2, we show during saccular lung development that hyperoxia down-regulates the complete mechanistic pathway of TGF signaling, including intracellular TGF signal transducer, pSmad3 (which predominates in lung), as well as a novel TGF downstream ECM effector, igH3. Similar to hyperoxia, genetic knockout of igH3 impairs saccular lung development. Through targeted genetic analysis of TGF signaling pathways in both our physiologic (hyperoxia) and novel genetic (igH3 null) mouse models of arrested saccular development, we identified known and novel biomarkers of BPD pathogenesis: Follistatin and Msx2 (negatively regulates myofibroblast differentiation), Cdkn1a (negatively regulates cell proliferation), and IL6 (important modulator of inflammation). We hypothesize that acute, short-lived suppression of TGF signaling within the saccular stage is sufficient to cause BPD, and that Tgf2 downregulation is the key ligand responsible and acts via suppression of Smad3 activation resulting in down-regulation of the ECM-modulating protein, igH3. By comparing our physiologic and genetic models of BPD, we will determine whether TGF mis-regulation is an active participant in the mechanism of arrested alveolarization or merely a compensatory response to lung injury. Aim 1 will examine whether early phase BPD is characterized by suppressed TGF signaling while subsequent upregulation following prolonged hyperoxia is a compensatory response to 2nd reparative mechanisms. Aim 2 will test whether TGF suppression via specific loss of TGF2 ligand alone is able to phenocopy BPD. Aim 3 will determine the mechanism(s) by which absence of the downstream TGF2 effector ECM protein, igH3, is sufficient to cause BPD.